Lasting Impressions: Conservation and the 2001 California Energy Crisis Loren Lutzenhiser, Portland State University Rick Kunkle, Washington State University James Woods and Susan Lutzenhiser, Portland State University Sylvia Bender, California Energy Commission ABSTRACT This paper presents the results of a study of household conservation response to the California energy supply crises during the summer of 2001 and in the post-crisis year of 2002. It draws upon two statewide telephone survey waves, with matched consumption information from customer electricity bills, and weather data from various parts of the state. The analysis explores conservation behavior, energy attitudes, social and housing demographics, and estimated energy savings. We found that the conservation response to the crisis exceeded expectations in the energy policy community, with consumers showing surprising flexibility in their energy demands, and for reasons other than energy prices. While conservation actions (both behavioral and hardware purchase) were reported by a large majority of households, they were also somewhat socially segmented, and the resulting energy savings were not evenly distributed across the population. There was persistence of conservation a year after the crisis, as well as continuing concern by consumers about energy-related issues. As a result of the crisis experience, the routine functioning of the energy system seems to have been "problematized" for many Californians. Some implications of these findings for future energy efficiency and renewable energy policies are considered. The Problem Beginning in the summer of 2000, California experienced serious energy supply problems, sharp increases in wholesale (and retail) electricity and natural gas prices, and isolated blackouts. In response to the rapidly worsening electricity situation in California in late 2000, a variety of efforts were undertaken to enhance supply, encourage rapid voluntary reductions in demand, and provide incentives for actions that would result in load reductions. Large-scale conservation marketing campaigns accompanied by financial incentives were directed at residential consumers to encourage both improvements in the efficiency of energy using equipment and changes in behavior, such as using less lighting, turning off unused equipment, reducing the use of cooling energy, shifting loads to off-peak times of day, and preparing for rolling blackouts. In addition, consumers in California also experienced price increases, threats of rolling blackouts, and widespread media coverage of the political turmoil and uncertainty surrounding the energy supply system. The California Energy Commission (CEC) recognized that the crisis presented a unique opportunity to gather information about conservation decision-making that could ultimately lead to improved policy development, program design and demand forecasting. As a result, the CEC commissioned a detailed evaluation of California consumer response during the summer of 2001 and beyond. The residential portion of that research is reported here. Findings represent a break from conventional policy thinking and are considered in detail in Lutzenhiser et al. (2003) and summarized in Kunkle et al. (2004) Consumer Behavior in Traditional Energy Policy Analysis Conventional energy policy wisdom treats consumer demand for household energy as relatively inflexible. Behavior change related to energy use is seen as rare and often resisted, with post-conservation “snap-back” to be expected. The implications of this view have included a focus on price policies (as motivators) and hardware programs (to secure efficiency gains without requiring behavior change). For a variety of reasons, the energy situation in California in 2001 provided a unique research opportunity to critically examine this view. Before considering our findings, it is useful to briefly recognize the fact that several social science disciplines have literatures that are relevant to the problem of understanding conservation behavior. As a result, the findings reported here also have a significant bearing on social science theory –– providing support for some views of consumer action and casting doubt upon others. The literature on household energy use and conservation is voluminous and has been carefully reviewed elsewhere (e.g., see Stern and Aronson 1984, Katzev and Johnson 1987, Lutzenhiser 1993, Shove et al. 1998, Lutzenhiser, Harris and Olsen 2002). Suffice it to say that research shows that energy-related consumer behavior is complex and multi-faceted. Data relating energy use to consumer behavior are scarce, making analysis of energy use difficult for both energy users and energy policy analysts. Relatively little of this work has made its way into energy policy discussions, however, and it is useful to consider the evolution of energy efficiency policy in order to understand why. The Marginal Status of the Consumer in 1980s-1990s Energy Policy To the degree that energy conservation (e.g., using less energy or not using energy or saving energy) has been part of California state policy for the past two decades, the concern has focused on justifying energy non-use from a least-cost utility planning framework –– and more recently from interest in reducing environmental impacts from increased energy use. The goal has been to acquire predictable levels of conservation by technological means. From the late 1970s through the 1980s, energy conservation measures aimed to improve the energy efficiency of hardware––devices ranging from refrigerators to light bulbs, from motors to building insulation. The “human factor”––e.g., voluntary conservation, frugal use of energy, curtailment of energy usage during periods of peak demand––was seen as too unpredictable and intractable to be a reliable policy target. In addition, the electoral defeat of Jimmy Carter in 1980 was believed to be due in part to his appeals to the American public for frugal energy use during the 1978 energy crisis (Nye 1998). Consumer understandings, behaviors, and conservation potentials were not emphasized in energy policy in the 1980s. Rather, policy was dominated by a “resource acquisition” (efficiency as a source of supply) logic. Consumer research was rarely undertaken, and consumer behavior 1 change was not addressed in the marketing of hardware-focused programs and incentives. 1 To be fair, we should point out that the resource acquisition approach favored technology because its effects could be readily measured. This allowed energy efficiency to be considered a resource equivalent to supply side resources. To counter the politically-damaging image of conservation as “sacrifice” in the Carter era, attempts were made to redefine energy conservation as “efficient use of resources,” that is, a way to get an equivalent level of service (no During the 1990s, a move toward deregulated energy markets led to a retreat of efficiency policy from resource acquisition and a turn toward “market transformation” (MT) approaches, where market actors were encouraged to pursue efficiency for their own self- interested reasons. The shift to an MT-focused energy efficiency policy, particularly in California and the Pacific Northwest caused some renewed interest in behavior. For the most part this involved encouraging suppliers to offer more energy efficient technology and services, and consumers to adopt those technologies and services. The principle of an “exit strategy” by market interveners assumed that there would be long-term changes in markets and presumably in the behavior of market actors. However, an understanding of these relationships was poorly established, and in many ways MT thinking was rooted in the traditional resource acquisition framework. Deregulation and the uncertainty around the potential for deregulation resulted in a significant decline in energy efficiency programs during the late 1990’s leading up to the energy crisis. Enter the Crisis: The Emergence of the Consumer as a Significant Party When the 2000-2001 energy crisis overtook California, the energy conservation policy framework focused on marginal improvements in hardware efficiency and a hope that competitive energy supply markets might encourage efficiency investment. The concrete policy options available to state leaders in 2000 included accelerating the purchase of hardware (lighting, motors, refrigeration, and cooling systems) and improving large energy users’ abilities to track energy use and market prices via interval (“real time”) meters and supporting communications hardware/software. Both of these avenues were aggressively pursued by California energy agencies. However, the magnitude of the crisis required exceptional action. So the California Legislature and executive branch went beyond the conventional policy frame to appeal directly to energy consumers via a novel “Flex Your Power” campaign. The campaign used a combination of media messages, appeals from public officials, executive orders to state agencies, news stories, and direct contacts with major corporations, local governments and other large energy users, to ask for voluntary conservation action of any sort––action that included changes in behavior, such as using less lighting, turning off unused equipment, reducing the use of cooling energy, shifting loads to off-peak times of day, and preparing for rolling blackouts (Bender, et al. 2002). The results were both surprising and welcome. Data and Methods The data used in this analysis were acquired from California